Chapter 10

Key person life policy

Engineering firm that would suffer financially from the death of a project manager should purchase a?

How much life insurance client should apply for

Life insurance, The needs approach is used mostly to establish

Each partner owns a $500,000 policy on their partners life

Two partners on equal shares in a business worth a total of $1 million. They both commit to the purchase of a life insurance policy that will find a buy sell agreement, which of the following is true?

Split Dollar Plan

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also prevents the employee to select a beneficiary?

6

A lost purchase buy and sell Agreement among three partners, funded with individual life insurance, would require how many policies?

ABC is the policy owner, C is the insured, and ABC is a beneficiary

C is a key employee at ABC Inc. If a key employee life policy is purchased on her life, which of these demons will be true?

Insured

In a key employee life insurance policy, the third-party owner I can be all the following except

Tax-deductible to the employer

The premiums paid by employer for his employees group life insurance are usually considered to be?

Fund a buy-sell agreement

What is considered a valid reason for small businesses to insure the lives of its major shareholders?

Establishes the needs of the individual and his dependence

When an individual is planning to protect his family with life insurance, one method of doing cells called needs analysis. What exactly does needs analysis involves?

Self maintenance expense

Which of these factors does not influence and applicants need for life insurance?

If both parents were to die, it will provide death benefits of the child

Which of these is not a reason for purchasing life insurance on the life of a minor?

business expenses

Which of these is not considered to be a cost connected with an individual's death?

Local unemployment rate

Which of these is not relevant when determining the amount of personal life insurance need?

It is used extensively in estate planning as well as business circumstances

Which statement regarding third-party ownership of a life insurance policy is true?

Company X

A key employee policy is taken out by company X on it vice President. 10 years later, this employee leaves company ex and begins working for a company wide. It is individual were to die in the policy is still in force and unchanged, where would the death proceeds redirected?

Each partner must only policy on the other partners

Companies he has a cross purchase by sell agreement and place a month and three founding partners. If the agreement is funny with individual life insurance, what would it require

A pension deficiency if the key employee dies

Which of these is not a reason for a business to buy key person life insurance?

The beneficiary is name by the key employee

Which statement regarding a key employee life policy is not true?